2 Garden Sales, Incorporated, sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May The following information has been assembled to assist in preparing a cash budget for the quarter 8 points a Budgeted monthly absorption costing income statements for April-July are: hook A $ 140,000 510,000 222,000 May $ 920,000 644,000 276,000 June $ 620.000 434.000 186.000 July $ 530,000 271.000 159.000 Hint Bales Coat of goods sold Grossman selling and administrative expenses Selling expense Administrative expense Total selling and administrative expenses Net operating in "Includes $34,000 of depreciation each month 92,000 51.990 149,000 5 79.000 111,000 69.600 180.600 $ 95,400 53.000 30,000 73,000 45.200 116.200 $ 67,800 1 56.000 References b. Sales are 20% for cash and 80% on account. Sales on account are collected over a three-month period with 10% collected in the month of sale: 70% collected in the first month following the month of sale, and the remaining 20% collected in the second month following the month of sale. February's sales totaled $290,000, and March's sales totaled $305,000 d. Inventory purchases are paid for within 15 days. Therefore. 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for Inventory purchases during March total $427,200 e Each month's ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise Inventory at March 31 is $103,600, Dividends of $41.000 will be declared and paid in April g. Land costing $49,000 will be purchased for cash in May h. The cash balance at March 31 is $63,000, the company must maintain a cash balance of at least $40,000 at the end of each month. L. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The Interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total 2. Prepare the following for merchandise inventory a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total 3. Prepare a cash budget for Apr May, and June as well as in total for the quarter Complete this question by entering your answers in the tabs below. Required 1 Required 2A Requred 28 Regured B Inventory at March 31 is $103,600. 1. Dividends of $41,000 will be declared and paid in April g. Land costing $49,000 will be purchased for cash in May h. The cash balance at March 31 is $63,000, the company must maintain a cash balance of at least $40,000 at the end of each month The company has an agreement with a local bank that allows the company to borrow in increments of $1.000 at the beginning of each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. int Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total, 2. Prepare the following for merchandise inventory: a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total. 3. Prepare a cash budget for April, May, and June as well as in total for the quarter. Print References Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. + Schedule of Expected Cash Collections April May June Quarter Cash sales $ 148,000 $ 184.000 $ 124,000 $ 456,000 Sales on account February 46,400 46,400 March 170,800 48,800 219,600 April 0 May 0 June 0 Total cash collections $ 365,200 $ 232,800 5 124.000 $722.000 FA Required 2A > ne month of points purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $137.200 e. Each month's ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise Inventory at March 31 is $103,600. 1. Dividends of $41000 will be declared and paid in April. g. Land costing $49,000 will be purchased for cash in May. h. The cash balance at March 31 is $63,000, the company must maintain a cash balance of at least $40,000 at the end of each month. L. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter Uook Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. 2. Prepare the following for merchandise inventory: a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April May, and June, and for the quarter in total 3. Prepare a cash budget for April, May, and June as well as in total for the quarter. References Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Prepare the following for merchandise inventory, a merchandise purchases budget for April, May, and June Merchandise Purchases Budget April May June Budgeted cost of goods sold $ 518,000 $ 644,000 $ 434,000 Add: Desired ending merchandise inventory Total needs 518,000 644,000 434,000 Less: Beginning merchandise inventory Required inventory purchases $ 518,000 $ 644,000 $434.000 Mc Prepare a casn budget April, May, and as well as in total for the quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 Prepare a cash budget for April, May, and June as well as in total for the quarter. (Cash deficiency, repayments and in be indicated by a minus sign.) Garden Sales, Incorporated Cash Budget For the Quarter Ended June 30 April May June Quarter Beginning cash balance Add collections from customers Total cash available 0 0 0 Less cash disbursements: Purchases for inventory Selling expenses Administrative expenses Land purchases Dividends paid Total cash disbursements 0 0 Excess (deficiency) of cash available over disbursements 0 0 Financing: Borrowings Repayment Interest Total financing 0 0 0 Ending cash balance $ 0 $ os 0 $ + 0